Major international boat shows are taking place in various parts of the world at the moment, but how is the industry doing? Many people found their luxury yachts to be rather nice places to self-isolate during the pandemic, but have the past 18 months been a motivation to spend your wealth on lavish toys such as boats, cars and planes or a wake-up call to rein in the spending and focus on more spiritual things?
In any normal year, about 150 superyachts (those measuring more than 30m in length) are completed. According to the latest Monaco Yacht Show Market Report 2021, compiled by Superyacht Times, instead of the market going down, it’s actually going up. The majority are between 30m-40m, accounting for 63% of the world’s superyachts with 40m-50m vessels being 21% of the total. What’s really interesting though is that it is the latter category that is on the increase with 56% of all the 486 new superyachts in build being over 40m.
As if this stat is not interesting enough, how about the fact that sales are reaching record numbers for both new and used yachts. Used sales are booming and the report says that there is even an undersupply of used luxury yachts longer than 50m.
It’s always worth pointing out that a used yacht, or boat of any kind is very different to buying a used luxury car. We don’t mean the obvious here, but that a yacht is often bought with a view to sending it into a specialised shipyard to be refitted with an entirely new interior that meets the requirements of the new owner. It’s something that gives both yachts and, for that matter, planes a regular new lease on life. Over the course of a year, about 500 superyachts are likely to undergo a full refit. It’s not a sustainability thing, just simple maths that says it can be cheaper to buy a used boat and fit a brand new interior than start from scratch.
It can also be quicker. At the moment, lead times on a new build can be up to four years, with many of the best shipyards around the world saying their order books are full to 2024. Instead, those who don’t want to wait that long are choosing to buy used, to then send their new toy in for a refit and have it back on the water in less than half the time.
Alternatively, just buy a used superyacht to use as it is, and there are plenty of them on the market at the moment that will do nicely, thank you. Of the 5,325 around the world, approximately 22% of them are for sale, including some commanding big numbers. This includes the huge 108m-long Benetti IJE, which is only two years old and has just gone on sale for an astonishing $175m, or to put it another way — R2.5bn!
However, that’s a bargain compared to the $235m (R3.4bn) someone paid earlier in 2021 for the 126m-long Lurssen Octopus, one of the largest yachts in the world that previously belonged to Microsoft co-founder Paul Allen. We can’t imagine anyone paying these kind of sums and then spending yet more money on changing anything, except maybe the bedding.
Is the boom in used yacht sales impacting negatively on new sales then? No, in fact sales of new superyachts could eclipse those of 2018 which at the time was the highest sales level for over a decade. What is going on?
It’s easy to blame the pandemic of course. So we will. Normal holidays were almost impossible in 2020 and for a big part of 2021. Unless you owned a yacht. Even those who would normally spend tens, even hundreds, of thousands of dollars chartering a yacht in the Caribbean or the Seychelles for their holiday couldn’t do that. So what did they do? They bought instead — “Enough with this renting thing, darling, let’s just buy our own.” Yes, some people really do have those sort of conversations over a glass of champagne during an evening.
As the world returns to normal, can we expect the yacht market to do the same? Probably. Those with the money to spend on the most lavish of super yachts will already have done so and those who bought rather than chartered should be content with their purchases for now. What we might see, though, is continued buoyancy in the used market as new sales face a few issues.
Just like the automotive industry, the yacht builders are struggling with a lack of semiconductor chips, which they need for many of the latest tech systems on board. A shortage of some materials is another issue but shipyards are generally very creative when it comes to finding alternative solutions.
So if you are in the market for a superyacht, then you might have to be prepared to compromise a little on either materials or the decision between new and old. Of course, we use the word compromise rather lightly here because, let’s face it, in there world of the superyacht, one person’s compromise is another person’s dream.